Australia Salary Sacrifice Calculator
Calculate tax benefits of salary sacrifice for super, car leasing and other items. Shows tax savings and actual cost to employee.
Max concessional: $27,500/year
| Item | Before Sacrifice | After Sacrifice | Saving / Change |
|---|---|---|---|
| Gross Salary | $80000 | $70000.00 | -$10000.00 |
| Income Tax | $16467.00 | $13217.00 | -$3250.00 |
| Medicare Levy | $1600.00 | $1400.00 | -$200.00 |
| Take-Home Pay | $61933.00 | $55383.00 | $-6550.00 |
Superannuation Impact
Super balance increase: +4.3%
Total Tax Saving
$3450.00
Income tax + Medicare levy
Take-Home Change
$-6550.00
-10.6% change
Key Insight
By sacrificing $10000.00 to super, you:
- - Save $3450.00 in income tax and Medicare levy
- - Increase your super by $8500.00 (after 15% tax)
- - Your take-home changes by $-6550.00
- - The tax saving reduces the effective cost of building super
Important Notes:
- Based on 2025 tax rates and limits
- Concessional contribution limit is $27,500/year
- Does not include Medicare levy surcharge or other adjustments
- Assumes employer contributes 11.5% SG separately
- Consult a tax accountant for individual advice
How Salary Sacrifice Works
Salary sacrifice means redirecting some of your pre-tax salary into super (or other approved benefits like cars under novated lease, laptops, work-related items). The redirected amount avoids your marginal tax rate (37% or 45% for higher earners) and is taxed at 15% inside super instead - a 22-30 percentage point saving on each dollar.
On $100k salary with $10k salary sacrifice to super: take-home reduces by about $6,500 (since the $10k would have been taxed at 32.5% leaving $6,750), but super grows by $8,500 ($10k less the 15% contributions tax). You're effectively converting $6,500 of after-tax cash into $8,500 of super - a 30% boost.
Concessional Contribution Cap
All salary sacrifice + employer SG combined must stay under the concessional cap: $30,000/year in 2024-25. Going over triggers excess contributions tax (the excess is added to your assessable income, plus a charge). Track your year-to-date employer SG and set salary sacrifice to fill the remainder.
Carry-forward unused concessional caps: if your total super balance is under $500k at the start of the financial year, you can use unused cap from the previous 5 years. Useful for catch-up contributions after parental leave, sabbaticals, or low-income years. Many higher-income earners can suddenly contribute $50-80k in concessional contributions in a year by combining current cap with carried-forward room.
Beyond Super: Cars, Laptops, FBT
Salary sacrifice into other benefits triggers Fringe Benefits Tax (FBT) which is paid by the employer and roughly equivalent to top marginal rate. FBT-exempt benefits (work laptop once a year, work phone, public transport tickets in some packages) work for everyone. Most other benefits make sense only if your employer absorbs the FBT or you're in a not-for-profit (FBT-exempt sector).
Novated leases (employee car packaging) are popular for full-time employees. The math depends on car cost, lease length, FBT method (operating cost vs statutory), and your tax bracket. Worth getting a tailored quote from a salary packaging provider rather than estimating - it's a complex calculation.
Who Benefits Most
Higher earners (above $135k, in the 37%+ bracket) benefit most from salary sacrifice into super because the tax differential is 22+ percentage points. Lower earners (under $45k, in the 16% bracket) see almost no benefit because their marginal rate equals the super tax. The Government Co-Contribution and Low Income Super Tax Offset (LISTO) help low-income earners directly instead.
First Home Super Saver Scheme (FHSSS) lets first-home buyers withdraw up to $50,000 of voluntary super contributions for a home deposit. This effectively turns salary sacrifice into a deposit-saving strategy with the tax advantage intact. The [Australia Super Calculator](/australia-super-calculator) models the full retirement picture; this tool focuses on the tax decision.
Frequently Asked Questions
Can my employer refuse salary sacrifice?
Technically yes - it's a contractual arrangement. In practice, most large Australian employers offer salary sacrifice through their payroll. Smaller employers sometimes have limited options. You can negotiate as part of remuneration discussions if your employer doesn't currently support it.
Does salary sacrifice affect my SG?
No - employer Superannuation Guarantee is calculated on your full pre-sacrifice salary, not the reduced amount. Salary sacrifice doesn't reduce the 11.5% SG payment your employer makes. This is a 2020 reform that fixed a previous loophole.
What if my income drops mid-year?
You can adjust salary sacrifice arrangement at any time. Reducing or pausing during low-income periods (parental leave, sabbatical) makes sense if you need more cash flow. Restart when income recovers. The flexibility is part of why salary sacrifice is preferred over locked-in arrangements.
Should I do salary sacrifice or after-tax contributions?
Salary sacrifice (concessional) is generally better for higher earners because of the tax deduction. After-tax (non-concessional) contributions don't reduce tax now but offer the concessional cap room for next year and other strategic uses. Most people maximise concessional first.
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